TD bank employees admit to breaking the law for fear of being fired

[Johnny199r]

I enjoyed reading all the responses in this thread.

[jammies]

If the managers and executives don't know illegal activity is going on, in what looks to be a regular, sustained basis:

1. They are incompetent.
2. They are crooked.
3. Both.

Neither make me think TD avoids the major share of responsibility in this scandal.

[Two Fivenagame]

Former TD employee here. Spent several years working at various branches across the city and worked from teller to financial advisor. I clearly remember the day when tellers suddenly had an S.R goal.

I have done and seen far worse than what is in this article. It makes me laugh.

TD is/was a freakin' joke. Every branch manager I ever had was a complete grease ball and urged all of their staff to sell life insurance or credit protection JUST like the way I was trained to sell extended warranty at FutureShop (CaptainCrunch is 100% accurate there).

Don't get me started on the pressure to sell high risk Mutual Funds.

I'm surprised this article hasn't come out years ago.

What really bothered me (and it still does) was how the staff was/is trained to handle customers - like we're offering the customer financial advise that purely benefits the customer. Well that's complete BS.

The Bank is not here for you. The Bank WANTS you to think that, so it can load you up with crap you don't need, or shouldn't have.

But the scary thing in this article is the mention of the number of employees on stress-related medical leave. I witnessed the collapse of many colleagues that couldn't handle the sales pressure. I would honestly like to know what the ratio is for number of employees on stress-leave per bank. It sure seemed like a lot.

[pylon]

Originally Posted by monkeyman

Do you track the dollar amount of warranties that go unused as well?

If you buy a car and keep the car to full term of the extension, you will on average beat the house 1.5/1. For every thousand you spend, you will typically get 1500 in claims. Most people buy a car with the intention to 'drive it into the ground'. The reality is, most people trade out at around 4 years.

Where the warranty provider wins, is on attrition. Trade-ins, write offs, and private sales where the warranty transfer doesn't take place. But the fact that manufacturers make money on OEM extended warranty plans is actually a myth. The net goal is zero. The try and break even every year on their fund. They are viewed as a retention tool. As a guy who gets a $15,000 Cummings Diesel engine replaced at no cost, is very likely to believe in the brand, and buy another vehicle. With the new AIC rules in Alberta allowing cancellation at any time for a pro-data refund, it has driven the costs up somewhat, as attrition can't be banked on anymore.

Third party plans, that's a different story. But I have only ever sold those when no other option was available.

[curves2000]

**** Heads up this is a long, passionate post so feel free to skip along but some good info here***

Former bank employee here myself and I can confirm with 100% confidence that this does happen across all different banks across the country for a variety of reasons, one of which is an ongoing issue with the insurance industry/lobby and the banking industry and how the federal government "regulates" banks via the Bank Act.

A few things to note though from the article and personal experiences some people may have had.

1) If a client requests a lending product such as a line of credit, credit card, auto loan than the client of course does need to do a credit check and application. If a client has a strong credit history, strong income, higher level of assets and an excellent long term relationship with the bank, than there is a strong possibility they may be approved for a higher lending amount than they thought or "need". Getting approved for a $20k line of credit when you only "need" $10k isn't illegal. The clients current financial situation suggest they could financially support a higher balance. It is illegal though to increase a client's borrowing limit on a product such as a credit card or line of credit without a client's authorization. This new rule came into effect a few years ago due to the fact that a lot of people were going deeper and deeper into debt without even realizing it. Some people would spend to their limit, pay a chunk off and than go back up to the now increased limit with even worse consequences. Rules have changed but as with anything rules are broken of course.

2) Earlier in my post when I mentioned an ongoing fued with the banks and the insurance companies boils down to this.
A) Banks are prohibited from selling BANK OWNED insurance products within their own branch network for things such as life insurance, disability insurance, auto insurance etc. All of these insurance products purchased or signed up for at the branch level are usually underwritten by a major Canadian insurance provider such as ManuLife, SunLife, London Life etc for products such as mortgage insurance. You will notice that banks such as RBC have branches and RBC Insurance offices usually next to each other, this is a way they can technically get away with selling their own proprietary insurance products "close by" to clients but not directly.

The issue that the banks have is that insurance products can usually be a fairly profitable business and they would LOVE the ability to sell their own products to their own existing clients via the branch/online network but they are prohibited by federal law. This is also why you see many banks offering insurance products only by calling a 1-800 line.

Insurance companies on the other hand are able to offer banking, credit and investment products alongside their own insurance offerings which technically gives them an edge but they traditionally haven't had expansive branch networks. Insurance companies have a whole host of products and services and what ends up happening is that US as consumers usually do, end up getting the short end of the stick when it comes to products, services and prices. If anybody wants me to go into further detail about insurance products and banks, I can. Do yourself a favor though and get REAL insurance for the major lending products in your life such as your mortgage.

3) When it comes to getting lending products approved ONLY if a client signs up for other products, well that is 100% illegal and its called tied selling. If the clients financially situation warrants an approval than they are approved. Banks are able to discount lending products or offer additional products and services at preferred rates as part of a package to attract and retain additional business, that's just smart business in my opinion. Customer X only wants 1 product @5% while customer Y was approved and wants 5 additional items? Price the loan @4% as an example.

This is also where additional products may have been offered to you even though you didn't request them.

4) The sales pressure in today's environment at financial institutions is REAL and concerning because as a profession, a lot of traditional bankers and advisers are being squeezed out. I partially blame TD for some of this with their push over the last 20 years of "ohh come on in, no appointment needed, we have some Joe Blow with an arts background willing to offer investment advice to you at 9 pm on a Thursday"

There was a time not too long ago where people had their banker, their lawyer, their accountant, their tailor, their mechanic, their doctor and pharmacist and a whole host of other professionals who could provide MEANINGFUL advice on the complex matters in life and could be counted on. Everything these days is so transnational, dealing with a new face every single time and having to tell your story from the beginning. Has anyone been to a Dr. office recently? Can you explain how they are always an hour late of your scheduled appointment when they clearly spend 2 minutes with every patient while writing a prescription for another drug when a LOT of times some MEDICAL ADVICE would be better??

As for investment sales in the traditional banking environment, part of that problem is that the banks today are trying to have everybody be everything to everybody. An expert at lending, analyzing risk, structuring loans and offering debt consolidating advice while at the same time time trying to keep up to date with changes in the equity , bond markets and other factors that affect your investment and retirement portfolios.

For the majority of bank clients who deal with the branch level employee's, odd's are the employee you are working with, aren't being paid a commission. Most of them are on salary with the potential for a small bonus come the end of the year so there isn't a large financial component for selling other products and services outside of their sales targets.

I will finish this long post off with this. Although the financial industry as a whole does get a bad rap the vast majority of people who work in the field are honest, good people who do care about their clients interest. Times have changed and so has the industry and sometimes not for the better. The thing that makes banks and insurance companies hatted is the fact that they deal with the emotional component of MONEY.

Corporations across the board from energy, medical,legal, automotive, food, technology or whatever have some EVIL people working there that do some awful things. At the end of the day no matter what industry you are in, there are guilty people by the thousands but its a sad reality of today's world.

If anybody has additional questions I will do my best to answer as this post has gone on LONG enough. Sorry about that!

[Coach]

Thanks curves2000. Former bank employee as well and I 100% agree with all that you said. I was thinking of a way to put my thoughts down, I'm glad I refreshed the page.

I would just add that there is an inherent difference between the idea of being cheated (or potentially cheated) by your car salesman vs your banker. The bank is supposed to be a place that guards your money. The idea that it's actually fighting in the opposite direction is concerning. Obviously they are for profit companies, but they are also necessary social institutions, and acting socially responsible is vastly more important in that field that it is in something like car or electronic sales.

[curves2000]

Originally Posted by MattyC

Thanks curves2000. Former bank employee as well and I 100% agree with all that you said. I was thinking of a way to put my thoughts down, I'm glad I refreshed the page.

I would just add that there is an inherent difference between the idea of being cheated (or potentially cheated) by your car salesman vs your banker. The bank is supposed to be a place that guards your money. The idea that it's actually fighting in the opposite direction is concerning. Obviously they are for profit companies, but they are also necessary social institutions, and acting socially responsible is vastly more important in that field that it is in something like car or electronic sales.

I concur with you 100%. I had the issue that I am very passionate about banking, the history, the culture and provide the best all around advice. I hate to say it, I was dam good at my job. This resulted in me getting a TON of clients and getting overwhelmed from client and co-workers alike.

I started to butt heads with management and the regional leadership team over a lot of the things discussed above and in the CBC article. My personal and business ethics precluded me from trying to push products and services that weren't in the best interest of the client. What got me sometimes was that I started to get lectured on time management when I was clearly busy cleaning up other employee's tire fire mistakes. Reversing interest charges for multi million dollar clients on pro-approved lines of credit because the original bank employee told them to "draw down on it, pay it back and we will credit you the interest so you get it on your credit history" In other words if the client used it, then we would get the sales credit.

The industry as a whole has changed and I have contemplated going back into a different avenue such as private banking or investment management. It's still a career path but I see so many unhappy colleagues it makes me wonder if its a good idea!

[IliketoPuck]

This article doesn't surprise me in the least.

As a former bank employee, I can tell you that the name of the game was always "cross sell, cross sell, cross sell" and it was a pressure cooker of an environment.

Not surprised to hear a bank facing these accusations. If it wasn't TD it was going to be one of the other ones eventually, they all do similar ethically grey things while amping up the pressure on their employees.

[OMG!WTF!]

Aside from secretly increasing your credit limits, a lot of this comes down to the weird phenomenon of people putting more thought into buying a latte than managing their money. Tall building?...check. Guy in suit?...check. It doesn't take an expert to get an early start and read and possibly even get second opinions on just about any product the bank offers including mortgages. It's not what we do though.

[Sylvanfan]

This sort of thing has to be happening at other institutions. Some of the things that I've heard in recent years from employees at these banks are asinine. I went to request a new debit card one day and some amateur is trying to get me to switch mortgages so I can get more PC points. I can see why these people end up stressed out when they likely get told several times a day that they just made a really bleeping stupid suggestion and that they can fata off for the rest of their day.

[Enoch Root]

Just quickly scanning through the thread, but the suggestion that this is more of an indictment of the employees than the employer is dead wrong.

In no way should the employees that did anything wrong or unethical be absolved of the responsibility for their actions, but let's be clear: this is an action of the employer. TD (and all banks, frankly) set the culture as the employer. And people do what you pay them to do. This is 100% on the bank, regardless of the fact that the individual employees are responsible for their own actions.

Crap like this is why I built my firm. And it's why I will never want for new clients. The industry (and it isn't just the banks, it's a majority of all the big national firms) flat out abuse clients/customers.

[IliketoPuck]

Originally Posted by Sylvanfan

This sort of thing has to be happening at other institutions. Some of the things that I've heard in recent years from employees at these banks are asinine. I went to request a new debit card one day and some amateur is trying to get me to switch mortgages so I can get more PC points. I can see why these people end up stressed out when they likely get told several times a day that they just made a really bleeping stupid suggestion and that they can fata off for the rest of their day.

I didn't work for TD but I can tell you that similar practices occur at other institutions as well.

It's the combination of immense pressures put on employees that leads to this type of thing. It's a systemic issue created by the incentives in the system that is filtered down from the very top and continuously perpetuates.

Need to compete with peers to rise to top in an almost gladiatorial way.

Bonus tied to metrics encouraging sales.

Ruthless hiring / firing practices.

[AltaGuy]

My grandfather worked for Nesbitt-Burns/Nesbitt-Thompson/BMO for 60+ years. Yup, 60 years: until he was in his late 80s. Loved the job. Was a stock-broker/bond-broker for most of that time and looked after his clients well and took pride in it.

You should have heard the man's anger at the slow change that started in the 1980s, and really ramped up when Nesbitt became institutional as BMO, as the focus became selling products rather than making money for the clients. Oh boy was he angry about it. Would go off for hours.

He spent 60 years taking pride in his job and felt absolutely betrayed that the job shifted toward selling and away from a position of responsibility/care.

[bizaro86]

I was at CIBC today and the teller next to me gave an old lady a hard sell on an unsecured line of credit when she came on to withdraw cash in person. Really classy.

[RinkRat]

Theirs a lot of fingers being pointed at the employees themselves, but a persons circumstances can really mess with what someone is willing to do.

I left my last employer because I couldn't compromise my integrity for such a ####ty place (CP Rail, was decent until Hunter), but I don't begrudge those that stay; as they have families and lives that require they stay, I was in a position that I could quit in the middle of a downturn without a new job lined up. Most don't have that ability.

[squiggs96]

Originally Posted by pylon

Sorry, no you were not. You could work somewhere else.

I worked in Automotive finance for years, you want to talk about being pressured to sell products? And the potential ramifications of losing your job were way more dire, as the automotive community is small and the stakes are much higher as far as income went. I took a 7 month break and tried the RV business. The money was better, but it seemed too sketchy, so I went back to my old employer. It's pretty simple. If you don't like what you are being asked to do, find another employer or career path. It's not like there is a shortage of banks to work at.

And in all, if I felt morally compromised in anything anyone asked me to do, I simply said no. Want to fire me, go ahead. I still have to sleep at night. My conscious trumps any career. Thankfully I work for a dealer that was always above board, but there have been certain products we have been asked to offer that could have easily boosted my numbers, that I refused to sell, as I felt they were of little or no value to my customers. I never had industry best numbers, but I always had happy customers, top level CSI, and people that came back for second, third and fourth purchases.

So no. None of these people were forced to do anything. They chose to do these things to get a bigger pay cheque first and foremost. TD may have/had a boiler room mentality, but the door is right over there if you don't like the culture or ethics.

I think it's much easier for you, or me, to say no to the managers. Three years ago I was working at a company and part of my responsibility was to sign off on the financial statements and tax returns. The owner knowingly and willfully asked me to change the numbers, for a variety of reasons. I said I wouldn't do it. I left the company shortly thereafter. When people asked about why I left the company, I was able to say that I had worked way too hard, and way too long, to throw away my CA designation over the owner wanting to commit fraud. This was true, but it was also fairly easy for me to leave a job. I made a high salary, my partner made more than I did, and our home at the time was paid off. I had a good network of peers, and accepted an offer the next week. Even if I hadn't taken the next job, I could have lasted a long time without one.

I'm not trying to justify what the front line people at TD did, but I think it's much harder for them to leave their job than it was for me to leave mine. I'm sure I'd make the same decision to not sign off on fraudulent statements, but I have a ton of back up plans. These people are the ones making $30,000 per year, with families and kids. Some of them are likely in some debt troubles, and if they get fired from the bank, won't have any source of income. It's also a lot tougher to get hired after you've been fired, even if you were in the right. I can see why some of these people did what they did. Desperate people do desperate things. I'm not condoning it, but I can understand it.

I put myself in a good situation, but I also was born into a good situation. As a white, educated male, born in Canada, I am put in privileged spots, that some (many?) of these people aren't able to take advantage of. I'm extremely grateful I don't have to make the decisions they were making. The stress for some of them must have been unbearable. I'm sure many looked for new jobs, but I don't blame them for waiting until they found one before leaving.

[bubbsy]

As a general self-proclaimed financial idiot, i walk into a bank and assumed everyone there is an expert in personal finance and, as such, are there to help me make decisions. That is complete, and utter B.S.

Banks are basically a retail sales organization. The articles simple emphasize that. These aren't financial advisors, they are Bank Sales folks.

So where does one go to, to learn what's best to do for personal finance decisions, where the monetization is something OTHER than a sales commission on product?

[Cecil Terwilliger]

Originally Posted by bubbsy

As a general self-proclaimed financial idiot, i walk into a bank and assumed everyone there is an expert in personal finance and, as such, are there to help me make decisions. That is complete, and utter B.S.

Banks are basically a retail sales organization. The articles simple emphasize that. These aren't financial advisors, they are Bank Sales folks.

So where does one go to, to learn what's best to do for personal finance decisions, where the monetization is something OTHER than a sales commission on product?

Youtube?

If you want personalized stuff you might find some financial literacy stuff from a non-profit. Maybe something like Money Mentors?

Problem is most of them are focused on people with debt issues or who live in poverty and truly have no idea about financial literacy at all. Not that it is bad that there are organizations out there helping people in those situations, just that you may find it difficult to find anyone willing to provide moderate to advanced financial advice/education without $$ being involved.

Beyond that you may have to take a night class at SAIT or something.

[MoneyGuy]

Originally Posted by bubbsy

As a general self-proclaimed financial idiot, i walk into a bank and assumed everyone there is an expert in personal finance and, as such, are there to help me make decisions. That is complete, and utter B.S.

Banks are basically a retail sales organization. The articles simple emphasize that. These aren't financial advisors, they are Bank Sales folks.

So where does one go to, to learn what's best to do for personal finance decisions, where the monetization is something OTHER than a sales commission on product?

Slava is a good choice.

[Locke]

Originally Posted by MoneyGuy

Slava is a good choice.

Without pimping Slava too hard, this is a good suggestion.

Honestly, someone like Slava is independent. He makes his living by doing good work for you. The Peons at the bank go in every day and have to hit their targets so they can hopefully make a few bucks and not get fired.

A guy like Slava has to build a business and a rapport with his clients and he succeeds as you succeed. Your incentives and interests are aligned and as you and your life and your finances grow and become more complicated you have someone who is with you along for the ride.

If you decide that you want to buy Flood Insurance for the Sahara desert Slava is going to tell you its a bad idea or a waste of money whereas the guy at the bank is only going to think about his commission cheque.

Thats the Key. Aligned Incentives and Compensation. Someone who knows you.

Seriously, you could walk into your bank and talk to a different guy every time. That should be the first Red Flag.